In Sindarin and Noldorin any surviving medial -y- [j] became i at some relatively late date. This is the third stage of such changes: in Primitive Elvish [j] became [i] between a vowel and consonants ([VjC] > [ViC]) and in Old Sindarin/Old Noldorin [j] became [i] between vowels ([VjV] > [ViV]). In this final stage, the remaining medial [j] would have appeared between a consonant and a vowel ([CjV] > [CiV]). This series of sound changes is a factor in Sindarin orthography, where i always represents the vowel [i] medially. However, at the beginning of a word before another vowel, i represents the “y”-sound [j], because this is the only place where that sound can appear:

I initially before another vowel has the consonantal sound of y in you, yore in Sindarin only: as in Ioreth, Iarwain (LotR/1114).

Tolkien described this sound change in his notes on the Noldorin usage of the Feanorian Alphabet from the 1930s:

This change in use was due to the loss of all spirantal quality by ON y = [j] in Exilic, and to its frequent conversion to vocalic [i] (PE22/32).

The clearest indications of the post-consonantal stage of these sound changes are the Sindarin verbs ending in -ia, which generally correspond to primitive -yā and Q. -ya:

• ✶PHERE > S. feria- “make ready” vs. Q. ferya- (PE17/181).
• ᴹ✶baryā́- > N. beria- “to protect” vs. ᴹQ. varya- (Ety/BAR).

It’s easiest to assume this change took place before i-affection, since the resulting forms invariably show this sound mutation wherever it is appropriate. However, some attested developmental series hint that the actual set of sound changes were a bit more complex:

• ✶eryā > erı̯a > erı̯ > irı̯ > S. îr “*alone” (VT50/18).
• ✶lisyā > liχı̯ā > leχı̯ > leich > S. laich “sweet” (PE17/148).

These two examples indicate that y first became asyllabic ı̯, and may not have always developed into a full vowel, especially in cases of later i-intrusion. From a purely symbolic perspective, however, it is easiest to represent this change as [-j-] > [-i-]. Elaran suggested this approach to me in a private Discord chat on 2018-08-25.

Conceptual Development: In Early Noldorin, examples like ᴱN. leithia- “to release” (LB/154) and ᴱN. rhoidia- as well as i-intrusion in adjective forms like ᴱ✶mburyā́ > ᴱN. boir “hot, raging” (PE13/139) and ᴱ✶nindyā > ᴱN. nainn “blue” (PE13/150, 164) make it clear that this sound change was a part of the language’s phonological history in the 1920s.

There is not much clear evidence of this change in Gnomish of the 1910s, but since y only appears medially as a vowel, it seems likely this sound change was present even at the earliest conceptual stages, despite the fact that Gnomish did not include the later system of i-affection that was so influential in Noldorin and Sindarin.

@@@ but not [-ja]? compare final [i] intruded into preceding syllable